AdExchanger.com: How did the InvestingChannel begin? And how has the company pivoted since it was first started?

ND: We started this business for a couple of key reasons, amongst others:

The business was started as an advisory business designed to help financial media companies with their digital advertising revenue strategies. We quickly discovered that many of our clients required execution both on the ad sales and operations/optimization side and often lacked the resources, reach and expertise to effectively monetize their valuable audience.

With the ease of content creation and the resulting proliferation of sites, particularly in finance, along with the desire for independent, trusted content, online audiences have dispersed to niche sites to consume content rather than the larger ‘big brand’ destinations. These audiences are highly coveted and desirable for endemic and non endemic advertisers but because of the fragmentation, lack of ad infrastructure and size, it is extremely difficult for advertisers to find and target these largely unduplicated audiences The business insights we gained from our consulting business coupled with the power and growth of the long/mid tail audiences led to the creation of InvestingChannel.

We started as a consulting firm. We moved at the request of many clients to the execution side first as a pure financial lead generation aggregator of investor sites. Now we exclusively manage all aspects of a publisher’s ad products/revenue (display, lead gen, email, newsletters, mobile, video, direct mail, etc.). In 2011, we are effectively evolving to a full-service revenue engine for publishers including initiatives beyond advertising such as a subscription development business, content distribution and development, video and mobile tools, etc. Our ability to overlay audience data is also key for the business in 2011 and will allow us to offer more integrated campaigns to drive engagement/branding and enhance ROI.

What are the keys to growing a successful vertical ad network?

I could write a white paper on this but to try and keep it brief, it’s about execution clearly. For example, it’s critical to understand what’s unique to the vertical, hire the right endemic staff, provide multiple services beyond banner sales/monetization, create operational efficiencies to scale, etc. However, what often times goes overlooked is the daunting infrastructure necessary to scale with hundreds of advertisers and publishers. That said, there are many networks out there and while it continues to be important to provide more and more advertiser services, we will also be differentiating ourselves with more publisher services. That said, we are not simply an ad network and have effectively become one of the larger financial media companies providing multiple revenue sources to our publishers.

Is Investing Channel profitable? Can you provide a sense of the company's scale?

We have been profitable for years now, but are actively reinvesting $’s back into the business. As far as scale, we have now over 250 publisher partners representing 10 million + affluent and engaged visitors and hundreds of advertisers in the IC family.

How do you see audience buying and the growth of targeting with data affecting your business?

We have to continue to be smarter to target our audience more finitely. And while it is important to use some of the commoditized data sources out there to facilitate this, as we are, it is just as or even more important to find data that is unique to our sits and/or network of sites. However, data targeting will be more critical for mass content/network plays versus highly vertical companies.

For publishers, how do you differentiate among other opportunities such as competing vertical (or not) ad networks and exchanges? Do you offer multiple digital formats, for example?

Yes, one way is to offer multiple ad products to combat some of the generic networks. However, that’s again where we are unique offering the same level of formats as a single site with much more efficiency across engaged users in niche sites. Publishers will also need to be much more integrated in their sales approach and hope that their brand and contextual relevance can sustain the more general network/data buying whether in or out of context. However, as mentioned above, we plan on offering more than just ad products to help our publishers such as content distribution.

What about agency trading desks -are you seeing or anticipating any impact from them? What's your view on the Agency Trading Desks (ATDs)?

ATDS already have impacted the ad market considerably…particularly for mass networks offering purely banner solutions. This type of buying can be done effectively using data targeting in an exchange environment and/or with ATDs. While we do not work with any at this point, it will become necessary to integrate with some of these where the controls exist on both sides to facilitate a buy without cannibalizing the value for the publisher or the target for the advertiser.

Please share trends you're seeing from your advertisers today.

Versus 1-2 years ago, we are again seeing longer term budgeting. While there has been pricing pressure across the industry, given how hyper-vertical we have stayed and the high value audience we represent, we have actually seen an increase in our CPMs and value to our advertisers as we get smarter with our targeting, delivery and optimization. The great thing about our model is that deal sizes continue to increase as we are constantly adding premium content, sites and audience and not constrained like a single site publisher.

We are seeing more advertisers wanting to push their content out there as a means of marketing and educating their audience. This is particularly important in finance as it’s a much different sell than buying a shoe or flight. In Finance, content has a much higher risk/reward than most other verticals and consequently, trust is key.

Although the majority of advertising currently is still in standard creative types, the push towards social, video and mobile environments is on. An integrated approach to build trust and engage their target audience is top of mind.

What controls do you offer your publishers and how do you preventchannel conflict?

We only work exclusively with managing our publisher’s ad inventory so there’s no sales channel conflict. However, they can absolutely control the type of ads seen on their site. Beyond this, we are building controls or rather products that allow our publishers to more effectively distribute content, aggregate content, drive subscriptions, create mobile/video content with our platform, etc.

What is the biggest challenge of running a vertical ad network?

Once again, it relates to execution and of course the scale and infrastructure that is such an intricate part of this business. However, a close eye always has to be kept on new ways of targeting, what’s happening with ATDs, how are mass networks trying to be more vertical, etc. It’s obviously important to understand your competition, but vertical networks need to stay relevant by continuing to provide more services to their publishers AND advertisers. Again, while we are differentiating ourselves with the products we offer our advertisers through our publishers, we are also providing tools for publishers beyond ad monetization that helps us create a true financial media company and not just a vertical ad network.

A year from now, what milestones would you like Investing Channel to have accomplished?

The word for us is double…double staff, revenue, infrastructure, advertisers, publishers, products, etc.